Leszek Morawski

Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland 1996-2003

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (nonrandom) fluctuation in employment the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996-2003. During these years employment in Poland fell from 51.2% to 44.2% and most of it occurred between the end of 1998 and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed purely to changes in employment.

Financial incentives to work in the context of a complex reform package and growing wages: the Polish experience 2005–2011

We examine the consequences of changes in work incentives in Poland between 2005 and 2011 resulting from a complex tax and benefit reform package and substantial real wage growth. While marginal and participation tax rates (PTRs) in the majority of analysed cases fall as a result of the introduced reforms, the conclusions from looking at replacement rates (RRs) for the population eligible for means tested benefits are generally different. These suggest that despite significant tax giveaways incentives on the labour market weakened for families with children and for those eligible to safety net benefits. Yet despite these negative policy implications, we show that work incentives improved substantially over the period due to significant real wage growth. When analysing the effect of the reforms on financial incentives to work, we often find conflicting conclusions when using the PTRs and RRs to reflect financial attractiveness of employment. This is not necessarily surprising, but serves as a note of caution on the use of each of them independently.

Subjective equivalence scale – cross-country and time differences

Purpose - The purpose of this paper is to calculate the subjective equivalence scale and poverty rates for Poland and compare them to equivalence scales in Eastern and Western Europe. Design/methodology/approach - The analysis is based on European Union Statistics on Income and Living Conditions data for 2005-2012. In particular, the authors capture the minimum needs income question and, knowing the minimum needs income of each individual’s observation, apply OLS regression controlling for income and household structure to estimate the poverty threshold, equivalence scales and poverty. Findings - The subjective equivalence scales for the Euro Zone are constant for the period 2004-2012 and less stable for the CEE countries. The child cost in relation to the cost brought by an additional adult is higher in the CEE countries than in the Euro Zone countries. The subjective poverty rates are lower than the OECD rates. The only exceptions are Latvia, Estonia and Bulgaria. Originality/value - The authors extend the analysis made by Bishop

Offering Time-of-Use Electricity Rates to Households in a Formerly Centrally Planned Economy: Insights from Consumer Tests in Poland

Electricity companies have become interested in demand-side resources for reasons of conservation and efficiency. Previous empirical evidence demonstrated that more advanced (nonlinear) price schemes may be successfully used effectively to manage consumers’ electricity demand in highly developed market economies. This article shows that it is as possible in moderately developed countries with less experience with a market economy. Data were taken from a unique field study conducted in a midsize city in central Poland (Kalisz), in which approximately 750 households voluntarily agreed to use time-varying rates, instead of the flat rate previously used. The study is based on a detailed analysis of changes in average usage patterns in 15-minute intervals. On average, consumers reacted to price signals as predicted by the traditional economic model of a rational consumer, the change in usage depended on the rate design. It can be argued that at the initial stage, when nonlinear pricing schemes are introduced, simpler rates are preferred, as consumers may have difficulty understanding new rates. Simplicity seems to be the key factor that helps to overcome possible cognitive problems and behavioral anomalies when consumers are exposed to new pricing practices.

Subjective equivalence scales using EU-SILC panel data for Poland, the Czech Republic, and Hungary*

Equivalence scales are commonly employed in income analysis to compare the wealth of households of various compositions (e.g., 0-child, 1-child). The choice of weights for this type of analysis is not self-evident. In this paper, subjective equivalence scales for households in Poland, the Czech Republic, and Hungary are estimated. We use longitudinal EU-SILC data for 2005–2012 following the approach of Goedhart et al. (1977) as employed by Bishop et al. (2014). The use of longitudinal data shows that previous results on the subjective minimum income that were based on the OLS estimates for cross-section data overestimated the impact from current income and underestimated the role of economies of scale. Subjective equivalence scales imply a decreasing marginal cost of children in the three countries, which makes them distinct from the OECD scale. The marginal cost of a first child is similar to the values assumed in the OECD scale, but the cost of a second child is much lower.